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2 Assumptions You Shouldn't Make About Your Home Insurance Policy

A problem people can have with insurance policies is making assumptions about them. You may have a policy that is paid for, but it does not mean that you are covered under all situations. Do not assume any of these things so you are prepared for an emergency when you need to make a claim.

Assumptions About Water Damage

A basic home insurance policy should cover water damage, but there are exceptions based on how the damage was caused. What you can expect to have covered is unforeseen problems caused by pipe bursts in your home. This can easily happen in the winter when the temperatures outside are below zero degrees. If a pipe is not insulated and is too close to an exterior wall, it can burst and make a huge mess in your home. This type of damage should be covered without much issues, but it may not be worth claiming if the damage is less than your deductible.

Flood damage, on the other hand, will require flood insurance. If water from a lake, ocean, stream, or even the rain enters your home, it is considered flooding. Confusion can happen if the sewer system outside backs up, causing water to rise until it gets to your basement window wells. Even though the flood was caused by a city sewer backup, it is not covered under sewer backup coverage.  You'll need flood insurance instead.

Having sewer backup coverage will only protect you if the water enters your home through a sewer pipe. This can happen due to a cracked drain tile going out to the main sewer, which allows water enters the pipe and gets into your home. The insurance will cover the damage in your home, as well as excavation costs to repair the pipe.

While these situations all involve water in your home, make sure you know if you are covered for all 3.

Assumptions About Your Deductible

You may be used to having car insurance where the deductible is based off a flat price, and you pay that whenever you make a claim. Home insurance can be a bit different.

Make sure you know what your deductible is, because it could be percentage-based rather than a flat fee. That means that your deductible could be about 1-2% of the value of your home, making your deductible on a $300,000 home between $3,000 and $6,000. Also, make sure you know if the percentage is based on the purchase price of the home or the appraised value, and how your insurance company determines that value.

For information on available non-standard home insurance options, contact a company like Metropolitan Insurance Service Consultants.


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